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In a startling revelation, North said Casey had intended to expand this fund with the arms sales profits and use it as an "off-the-shelf, self- sustaining, stand-alone" fund for operations that the director felt the CIA could not or should not carry out. This would get around two bothersome legal requirements: having to seek presidential approval and then reporting the supersecret presidential "finding" to Congress. Democratic Senator Daniel Inouye, who presided over the hearings, called this an attempt to create a "secret government within our Government."
According to North, Casey also thought up the "fall guy plan," in which the ever loyal Marine would take the "hit" if any of the many secret operations were exposed, thus protecting higher officials -- especially the President. When the Iran-contra scam did unravel, the trail led quickly to North. A private U.S. aircraft carrying supplies to the contras was shot down over Nicaragua last Oct. 5, and the downed airmen were carrying telephone numbers that linked them with Robert Owen, North's personal courier to the contras. Two days later Casey learned that angry middlemen in the Iran arms sales were claiming they had lost millions and were threatening to expose the diversion. Thus in early October, North testified, Casey told him to "clean up the files." North went on a shredding binge that included the account ledger and had him turning documents into confetti on the day he was fired.
Virtually all the activities attributed to Casey by North sharply contradicted Casey's repeated declarations of not knowing what North was doing at the NSC. In his last interview before he died, the director in December told TIME that "I knew nothing of any diversions" until the investors threatened to reveal them. The CIA, Casey said, "didn't have any information" on where the contras were getting financial help.
In his bursts of candor, North pulled other officials more deeply into the scandal. "I'm not trying to pass the buck here, O.K.?" North declared angrily. "I did a lot of things and I want to stand up and say that I'm proud of them." But he denied acting alone as a "loose cannon . . . People used to walk up to me and tell me what a great job I was doing." Among them, he declared, was Secretary of State George Shultz, who opposed the Iran deals but, claimed North, "knew in sufficiently eloquent terms what I had done" for the contras. Shortly before he was fired, North said, Shultz took him aside at a party, "put his arm around my shoulder and told me what a remarkable job I had done keeping the Nicaraguan resistance alive." (A spokesman for Shultz said the Secretary had intended only to compliment North for boosting contra morale.)